The Business of Letting Go

While the problem of succession and leadership transition vexes many businesses, it is never more evident than in the eponymous Fashion Houses throughout the world. Ralph Lauren, Oscar de La Renta, Givenchy are just a few of the familiar names that have struggled in moving past the founder  Ironically, there are few businesses more dependent on a successful creative and leadership transition for its legacy and livelihood than a fashion label.

So, it is no wonder that when it appears that a founder of a fashion brand may be succeeding with that transition, it becomes newsworthy in both the fashion and business press. With the reviews and results of the most recent collection at this month’s New York Fashion Week, it appears that Diane von Furstenberg may be well on her way to achieving the “unicorn” of the fashion world – a successful transition of the creative leadership to the next generation. Most recently, in his second collection as the new Creative Director for DVF, Jonathan Saunders has begun to make his mark in the way that critics and customers measure success – increased sales and sold out collections.

Because these transitions are challenging in nearly every business, I have these discussions with business owners often. When the topic arises, I often ask two questions – what are they going to do when they are no longer (an owner, the President, the Leader, etc.) and why aren’t they doing those things already? Typically, the responses include vague plans of travel, new volunteering or recreational activities – usually they list endeavors the business owner has not even attempted before. But just as often, these driven and goal oriented leaders simply haven’t thought much about their “after” life at all. And this is a problem – for them, their business and in the case of a leadership transition, their successor.

Without clarity of our future we typically fall back to what we know. Ms. von Furstenberg has become increasingly active over the past few years with philanthropy and other interests related to but outside of her business. She has stated consistently that she wants more time to devote to these activities and appears to be doing so. This commitment to outside interests may be a key to this transition’s initial success.

I often liken it to having two drivers looking for a space in a crowded parking lot. They both may spy the same space but only one car can park there. If the founder and her successor keep eyeing the same position and responsibilities within an organization, rarely can the new leader be successful. Entrepreneurs tend to be visionaries and without a new vision, we just stay stuck in the old one.

Recently, at the Value Builder™ Summit in Las Vegas, I had the opportunity to listen to Bo Burlingham, Forbes contributor and author of Finish Big: How Great Entrepreneurs Exit Their Companies on Top. During his presentation, Mr. Burlingham discussed the keys to a great exit for an owner and I think these lessons can easily apply to any type of transition. They are:

  1. You feel that you have been treated fairly in the exit process
  2. You have a sense of accomplishment and contribution to the world
  3. You are at peace with what has happened to the other people who helped you build the business
  4. You have a developed a new sense of purpose outside of the business
  5. The company is successful and growing without you

This is not the first time Ms. von Furstenberg has gone down this path and time will only tell if this hand-off is a success.  But I noticed in more than one interview, she has ticked most of the items on Mr. Burlingham’s list and seems equally passionate about her pursuits outside of DVF and the desire to leave a legacy through her business.

Perhaps, in the end, letting go is the greatest gift we give our business and the world.